writes Ahmed ElAmin The Bank of Butterfield begins a new era with a clean slate after a difficult period of restructuring for the person who takes over as president and chief executive officer, said Sir David Gibbons.

Sir David retired as chairman of the bank as is mandatory when the age of 70 is reached. He was replaced on Wednesday at the bank's annual general meeting by Dr. James King, the vice chair.

"There is no more restructuring that basically needs to be done,'' Sir David said during an interview at his office in the Gibbons Co. Ltd. building on Reid Street. "...Every skeleton has been prised out.'' He has known Dr. King's family for about 50 years. Asked whether Dr. King had the type of international experience need to run the bank he said board members -- such as Robert Mulderig of Mutual Risk Management Ltd, and Brian Duperreault -- would provide the expertise he could draw on for advice if necessary.

"Dr. King is very knowledgeable locally,'' Sir David said. "He is very well liked and has a personable nature. It's desirable to have a Bermudian as chairman.'' He praised John Tugwell -- who quit after about six months on the job as president and chief executive officer -- for the work he had done in reorganising the bank and in cutting costs. Mr. Tugwell quit for undisclosed personal reasons, leaving the bank to seek its fourth chief executive in about a year. "He has left us with a first rate management structure,'' he said.

"We just need a skipper.'' That skipper had been identified by a committee, Sir David said, and was being put forward to the bank's board for a decision on whether to make a hire. Sir David characterised Mr. Tugwell as a talented fixer. Now the bank needed someone who could go out and market its services worldwide.

"The restructuring is now complete,'' he said. "John Tugwell has been absolutely first class. To my knowledge, nobody had more experience anywhere in the world...We had a great opportunity to have a man of that calibre to do the restructuring. He had a remarkable ability to place people and estimate their abilities. We now need somebody who is going to build on what he structured. We need someone now who can go out and market the bank.'' Since Mr. Tugwell's tenure began in May the bank closed its Singapore office and downsized its London office, exiting from the UK deposit-taking and lending market. Mr. Tugwell also cut about 20 management positions locally.

The bank took a $20.6 million one time charge for the cuts, recording a profit of only $4.2 million for the year ended June 30. The bank's profits have since rebounded to a record $10.7 million for the first quarter ended September 30.

Sir David said the problems in London had been due to bad management. The defaults on loans got so bad the Bank of England insisted on an audit. He defended the bank's earlier decision to go into the Singapore market. It was what the bank's clients in Hong Kong wanted in case trouble occurred in the handover of the former colony from British rule to China.

The clients indicated they wanted the bank to establish an exit for them set up somewhere in the region. The rush to the door didn't happen and the office became a drain on the bottom line. "You could say it was a type of reinsurance,'' he said. "We didn't have an earthquake and if we did we would have had the gratitude of our clients.'' The early retirement package offered to employees aged 55 and over was a means of allowing younger people to move up in the ranks, Sir David said. About 44 had taken the offer. And about 30 people had been identified as having "special potential'' to become executives and were currently being given the option of learning the ropes necessary to lead the bank forward into the next century, Sir David continued.

Sir David became a director of the bank's board in 1958 when he was 30 years old. He left to become a member of parliament in 1975, and served as a minister of finance for nine years. He became premier from 1977 to 1982. He rejoined the bank's board as chairman in 1986 after a stint as chairman of the Bermuda Monetary Authority.

He has now become chairman of the Colonial group of companies, one of the family's firms. Including its insurance company in Bermuda, the group owns 40 percent in an insurance company in the Cayman Islands, and two insurance companies in the Bahamas, where Colonial is building a headquarters.

END OF AN ERA -- Sir David Gibbons